General Conference Mennonite Church vs. the IRS

Representatives of the General Conference Mennonite Church and the Internal
Revenue Service failed to reach an 11th-hour compromise at a meeting in
Washington on Jan. 4
which would have averted a suit by the 63,000-member denomination against the
government agency.

IRS
officials at the meeting denied that there was any administrative solution to
the conference’s complaint that it must withhold the income taxes of its
employees, thereby acting as a tax collector for the state. The denomination
has argued, and will argue in a forthcoming judicial action, that the
IRS
requirement violates the concept of separation of church and state as embodied
in the First Amendment in the
U.S. Constitution.

“The 45-minute meeting was cordial, but unproductive,” said Vern Preheim,
general secretary for the conference. “We outlined our concerns about the
withholding issue as a historic peace church and described the problem which
the IRS
requirement poses for us.”

William Ball, the conference’s attorney in the matter, then formally asked
members of the
IRS’s
special working group on withholding issues whether there was any way to
exempt the General Conference from the problematic requirement.

Nancy Schuhmann, who chairs the special group, stated that the
IRS must
abide by its codes of operation and would not be able to offer an exemption on
tax withholding to the conference.
IRS
officials Susan Cunningham and Gail Libin were also present.

In light of the results of the Jan. 4
meeting, attorney Ball will complete the preparation of the conference’s
complaint and submit the brief to a
U.S. district court
after one last check to make sure all administrative possibilities have been
exhausted is complete.

The General Conference’s General Board was authorized to initiate a judicial
action on the tax withholding question at an international gathering of the
conference membership at Estes Park,
Colo., in
July 1980.

More than a year earlier, on Feb. 10, 1979,
delegates to a special midtriennium conference session instructed the
GB to “use all
legal, legislative and administrative avenues for achieving conscientious
objector exemption” to the tax withholding requirement.

GB also heard a
brief report by its general secretary, Vern Preheim, on the progress of the
judicial action on the tax withholding issue. Progress seems to be slow, as
witnesses and a co-plaintiff have to be found. Employees of the conference who
are taking action of their own on the war tax issue were assured of adequate
and appropriate conference support.

But by the 13 April 1982 issue, everything
had come to a screeching halt:

In the light of a negative judgment rendered by the
U.S.
Supreme Court against an Amish employer on
Feb. 23,
the General Conference’s judicial action committee has recommended to the
denomination’s General Board that a planned suit against the
IRS
on the issue of tax withholding “be put on indefinite hold."

The committee’s decision came at the end of a
March 19 conference call with William Ball,
who has been preparing the case on behalf of the church group over the past
year. During the telephone meeting. Ball indicated that, considering the
Supreme Court ruling in the case
U.S.vs. Lee,
the General Conference would almost certainly lose its case.

In the Amish case, employer Edwin Lee argued that his withholding of Social
Security taxes was against both his own and his employees’ consciences.

In the unanimous decision of the court on the Amish question, Chief Justice
Warren Burger wrote, “The tax system could not function if denominations were
allowed to challenge tax systems because tax payments were spent in a manner
that violates their religious belief."

Rather than pursue a negatively shrouded course of action at this time, the
General Conference committee also urged the General Board to make more money
available “for additional efforts to promote the World Peace Tax Fund.”

In his letter to General Board members, general secretary Vern Preheim
concluded: “With closure of the ‘administrative avenue’ during my
January 1982 meeting with
IRS,
and now closure of the ‘judicial avenue’ via
U.S.vs. Lee,
we are left with the ‘legislative avenue’ as our only conceivable legal avenue
prior to our August 1983 triennial sessions.

“If no significant progress is made in terms of additional congressional
sponsorship of the
WPTF
legislation, we will have to report a totally negative outcome to the efforts
resolved at Minneapolis in 1979. This will again
bring us to the threshold of divine obedience/civil disobedience.”

In coming to that decision, the group weighed the importance of a number of
concerns, including the timing of the
GC action, the
witness value of the suit if it were pushed forward, the fact that a loss in
court might set a negative precedent which would eclipse favorable decisions
in related cases, and whether proceeding with the action when defeat seems
certain would be good stewardship.

Preheim hopes to gather together preliminary response of the General Board to
the committee recommendations in the next few weeks. A full discussion will
take place at a fall meeting of the board.

Realizing they had reached a critical juncture in their church’s ongoing
struggle against the payment of taxes used for war, members of the General
Conference’s General Board decided on Oct.
2 to stall its impending suit against the
IRS and
let delegates to next year’s triennial sessions
decide on what course of action to take.

A resolution to proceed with the judicial action, which would have tested the
constitutionality of laws forcing the church to collect taxes on behalf of the
state, was turned down by a vote of six to two, with seven abstentions. The
move to put the suit on indefinite hold was based on recommendations from the
church’s judicial action committee and the denomination’s attorney in the
matter, William B. Ball of Harrisburg,
Pa.

In a letter to general secretary Vern Preheim dated
last February, Ball had been pessimistic about
the chances of the judicial action’s success in the light of the
U.S. Supreme Court
ruling in the case Wisconsin
vs. Yoder
[sic]. As part of its ruling in that case, the court had
stated, “The tax system could not function if denominations were allowed to
challenge the tax system because tax payments were spent in a manner that
violates their religious belief.”

“We regard that language as most threatening to [the General Conference’s]
position, if not foreclosing it completely,” wrote Ball.

Rather than scuttle the proposed litigation completely,
GB members agreed
at the recent meetings to consider the suit again, “if and when more favorable
conditions prevail and depending upon the response at Bethlehem,
Pa.” (the location of
next year’s triennial sessions).

Delegates to the General Conference’s 1980
triennial sessions in Estes Park,
Colo., empowered the General
Board to initiate a judicial action as a follow-up to a special session on the
theme of Christian civil responsibility in Minneapolis a
year earlier. At that meeting, delegates resolved to “use all legal,
legislative and administrative avenues for achieving a conscientious objector
exemption from the legal requirement that the conference withhold income taxes
from the wages of its employees.”

Part of the General Board’s Oct. 1–2
discussions focused on interpretation of that resolution; namely, at what
point each of those “avenues” would be considered to have been exhausted. Some
members felt that Ball’s advice closed the legal avenue; others said that the
judicial route would not be blocked until a court ruled against a suit brought
before it by the conference. Many agreed that a legal test would be an
important public witness and is, for that reason alone, worth considering
further.

The administrative avenue to a solution was eliminated after a meeting between
GC officials and
representatives of the
IRS on
Jan.
4, when
IRS
declined to make any exceptions to rules requiring the conference to withhold
taxes from the salaries of its employees. The World Peace Tax Fund
legislation, currently in committee in the
U.S. Congress,
represents the legislative avenue.

Board members will ask the
GC delegate body
to answer some of these questions at Bethlehem
’83, and to make a decision about whether or not
the conference’s business office should simply go ahead and stop withholding
taxes from the salaries of those employees who wish it, thereby breaking
IRS
regulations. In such a case, the general secretary and business manager would
be immediately responsible, Preheim reported.

The conference’s judicial action committee will prepare appropriate background
materials and resolutions for presentation at Bethlehem and present these to
the General Board at its March 1983 meeting
for review.

Miscellany

Level one — tax protest. Why is it that those who feel uncomfortable
with tax resistance spend more time protesting civil disobedience than war
taxes?

Persons filing and paying taxes each April 15 should attach a protest letter,
outlining one’s opposition to how 50 percent of the tax money will be spent.
Most importantly, copies of this letter should go to your representative,
senators, newspaper editor and should be posted in the church. Openness is
critical. The
IRS is
fearful of those who publicize their tax protest — even if it is merely a
letter — because it encourages others.

For those who feel exceptionally penitent, file back letters of protest and
ask that they be attached to your previous returns.

Level two — tax resistance. This is a clear call to civil
disobedience — organized tax resistance with acceptance of penalties. Having a
support group to guide you in this decision is important. Hopefully,
congregational affirmation of such a decision would be forthcoming. One should
be prepared for the
IRS to
use its unchecked power to collect any income or other tax owed.

Level three — tax avoidance. Legal tax avoidance — keeping one’s income
below taxable levels — is certainly in line with living more with less.
Perhaps we ought to have our
MCC
overseas workers explain to us how half the world can live in poverty on $100
a year, when we with abundance and waste all around us cannot seem to live on
less than $10,000.

Legal tax avoidance has the additional blessing of insuring that no income tax
is used for war. Minimum
U.S. income levels
for 1981 are $3,300 for single people and $5,400 for married couples.

Level four — tax counseling. This level incorporates any of the three
levels above, but commits one to a study into the
IRS,
military budget and federal tax policy. Just as draft counselors sprang up
during the draft years, we need more tax counselors to aid us in responding to
the draft on our money.

According to Sen. Pryor,
D-Ark.,
the Pentagon spends more on military bands — close to $90 million — than we
spend on arms control — about $20 million. When will we hear the music?
Perhaps there is no single right answer for everyone, but surely silence is
not an acceptable response.

The 13 April 1982 edition reviewed
Affirm Life: Pay for Peace,
a small handbook put out by the Historic Peace Church Task Force on Taxes,
designed in a loose-leaf form so it could be updated, and meant to help classes
and discussion groups explore their response to war taxes.
(There was another review of the book in the 8 June edition.)

James W. Nikl, in an 11 May 1982 letter to
the editor, encouraged readers to consider cutting their income to cut their
taxes.
“What
would happen if we all cut our incomes in half?” he asked. “How would it
affect the military budget?” He did the math for a dual-income couple in the
49% tax bracket and found that they would significantly lower their taxes and
gain a lot of valuable free time in the bargain. He concluded:

We have a choice. We can race our motors all our lives, and the government
will take most of what we produce. Or we can take time to smell the flowers
along the way.

In response to a critic who thought Nikl’s tax advice was too materialistic and
coldly practical, he responded:

I agree with what [the critic] said about our attitude toward material
possessions. We should put a strong emphasis on the gospel of peace which
embraces the needs of those in our community who are without. I believe,
however, that Mennonites should and would prefer to use their own wealth as
they see fit and would be much better stewards of God’s bounty than the
U.S. government.

I doubt that willfully giving of our tax money so that a small portion will go
for human resources is really attractive to many Mennonites. I would also
question whether the good effects of the human resources portion of our tax
even comes close to offsetting the bad effects of the military part.

A testimony of an “outsider” in 1785 attests that
Mennonites were still people of conscience at the end of their first century
in North America: “It is well known that the Quakers and Mennonists were
formerly some of the best farmers in Pennsylvania. These people, from having
their cattle, horses, farming utensils,
etc., so often
taken from them for taxes, have sensibly declined as farmers. Many of them
have sold their farms and gone to other states, whilst others of them do not
raise 20 bushels of grain, where they once raised 100.”

MCC
has spent over $10,000 to purchase and ship about 1,200 shovels to Laos.
$4,000 of that amount was allocated from
MCC’s
“Taxes for Peace” fund [which] was established in
1972 to receive contributions from church members
who had voluntarily withheld portions of their taxes as a symbolic protest
against the government’s excessive spending for military purposes.

News from Other Denominations

The Lutheran Peace Fellowship recently issued “A Call to Tax Resistance for
Lutherans” statement committing members to tax resistance as a moral stand
against the nuclear arms race. According to Dennis Jacobsen, fellowship
coordinator, 23 Lutherans from 11 states endorsed the statement, which said,
“We will no longer pay for war while praying for peace.”

The St. Thomas Aquinas Parish
in Indianapolis made a public decision to withhold payment of the excise tax
on its phone bill. This was done, said the congregation, “in response to the
gospel call to be peacemakers and to church teachings that we, as Christians,
must devote ourselves to the cause of peace — and, in particular,
disarmament.”

Role of our churches. Recently the Boulder,
Colo., Friends Meeting
proposed a position of peace secretary for the congregation. That person would
become an authority on taxes and related items and keep the rest of the
congregation informed as to how to legally divert their tax dollars from
military uses. We could perhaps create a position on our various church boards
and work toward this same goal.

Two members of the Methodist Federation for Social Action have found an
innocent way to protest
U.S. budget
priorities. John and Pat Schweibert concluded that about 41 percent of their
income tax was going for armaments. So they withheld that mount from what they
owed, then handed out a $5 bill to each of 200 unemployed people they found in
line at a state employment office. The distribution, timed for
April 15, received coverage in the local
paper.

Seattle Catholics gave significantly more to the annual archdiocesan funds
appeal after their spiritual leader, Archbishop Raymond Hunthausen, took a
strong stand against nuclear war, reports the lay-edited National
Catholic Reporter. “We thought the archbishop’s stand would have some
adverse effect on the appeal,” said Paul LeBlanc, archdiocese assistant
director of development. “We didn’t think (the funds) would be this large… The
letters to the diocese are running eight to one in favor of the archbishop.”
Hunthausen has attracted nationwide notice for withholding the portion of his
federal income taxes used for the military.

A petition with 14,000 names of Old Order Amish in Lawrence County,
Pa., was presented to
Rep. Eugene V.
Atkinson, a Democrat whose district includes Lawrence County. The Amish are
seeking a legislative remedy to having to deduct Social Security taxes from
employees’ salaries. A bill by
Rep. Robert S. Walker
(R-Pa.),
and cosponsored by Atkinson, would exempt members of religious faiths opposed
to the program from paying Social Security taxes.

Hanno Klassen sent the Internal Revenue Service two checks this year — each
for half the amount he owed. One was made out to
IRS; the
other (to cover the military share of his taxes) was made out to the American
Friends Service Committee. Klassen explained his action in a letter to
IRS:
“The check made out to
AFSC
is to show that I want to pay what I owe. But I cannot let my life or my
substance be used for killing. You see, I was a member of Hitler’s destructive
forces in World War Ⅱ. I was used once; I will not be used again.”

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